Mia Fileman 0:05
This is Got Marketing? – a fad-free, fluff-free, no-nonsense podcast for marketers looking to work smarter.
I’m your host, Mia Fileman – a marketing strategist with over two decades of experience, and an entrepreneur.
I’m tired of marketers telling you what you want to hear. Instead, I tell you what you need to hear. During the show, I chat with creatives and strategists about all the aspects of marketing, but especially marketing campaigns. Unpacking and dissecting marketing campaigns is what I do for fun.
Got Marketing? is brought to you by Campaign Del Mar – the marketing education platform where marketers and entrepreneurs go to upskill.
Let’s dive in, shall we?
Hello, friends! Welcome back to the Got Marketing? Podcast!
I have a really exciting episode planned for you today. However, I want to caveat that, in Darwin at the moment, there is a military exercise of F-35 jets. You can probably hear them in the background. I’m really sorry about that! It’s quite the coincidence that this exercise has coincided with the launch of Maverick: Top Gun. Just keep that in the back of your mind as we go through the episode.
Today on the show, I am joined with a dear friend, Fiona Johnson, who is the Founder of Peach Business Management. What we’re going to talk about is one of the questions that I get asked the most from my customers and my students which is where to invest our finite marketing dollars.
Fiona Johnson is a chartered accountant who plays where profit and purpose meet – at that intersection of impact and profitability. She is a business and finance strategist for small and medium business owners and works collaboratively with her clients to create business plans and financial forecasts. She is so passionate about teaching her clients about money management, mindset, and business planning.
Welcome to the show, Fi!
Fiona Johnson 2:18
Thanks, Mia! Thanks for having me!
Mia Fileman 2:22
I’m so excited about this because one of the things that I have found working with SMEs is that they just don’t have a marketing budget. They are literally winging it when it comes to their marketing expenditure. I would love to know from you, what is the state of play on your end? What are you seeing when it comes to female founders and their money management?
Fiona Johnson 2:49
Yes, that’s such a good question.
If you’ve come from a marketing background, perhaps you’re coming at things from a slightly different perspective, so you know that you’ll be able to do a lot of your own marketing in those early years while you’re getting yourself set up.
Generally, what I see from female founders is that they are very risk averse. They’re scared of investing large amounts of money in anything that they see as being risky. But once they get going, females are really good money managers.
If I compare my female clients to my male clients, on balance sheets looking at people’s assets, I will see that men tend to be more open to investing in things that they see they can leverage such as new equipment or new hires or whatever it might be in their business. Women tend to lack the stability of having quite a lot of money in the bank, and there’s a really different way of thinking about risk and how much money feels comfortable for different people as well.
Mia Fileman 4:01
So interesting how the two genders approach that!
Many of our listeners are bootstrapping their start-up and are not at that stage of getting capital investments or VC funding at all. I’d love your thoughts on when is the right time to make an investment in your brand.
For instance, when I started Campaign Del Mar, I made a director’s loan from my personal Mia Fileman bank account of around $20,000 to set up Campaign Del Mar. Over the last three years, I have long since paid this off. But it really allowed me to hit the ground running.
What do you advise your customers?
Fiona Johnson 4:50
The first thing to say is not all businesses need seed funding. For some businesses, particularly where it’s going to be a service-based business, there might be just the need for that really very basic seed funding. I think I started my business with about $2,000 and spent pretty much all of that on creating a visual brand because I knew that that was the most important thing for me to differentiate myself.
If you are starting a business as a service provider, there’s a big chance that you can actually slowly work your way through to the point where you are able to either invest money that you’re earned from customers back into your business or at least get enough traction going with your clients that you do feel more comfortable bringing in an investment from somewhere.
Probably all of the listeners will know that it’s really hard to get a bank to back you as a business owner when you don’t have any runs on the board. For many people, the only option really is to bootstrap which is where you work and keep working until it works somehow. Or to use something like a credit card or a personal loan. Those two options can work for some business owners.
If you are starting a product business, you’re probably more likely to need funding because a product business usually – if it’s a physical product – requires you to purchase the product and have a lot more infrastructure set up than you would need if you were a consultant who just needs a LinkedIn profile and a website.
I think a lot of people think of funding as something that would happen from an investor or VC or venture capital, but actually another funding source is our customers. I think it’s something that a lot more businesses – particularly in start-up phase – need to really leverage.
Let me backtrack a little there.
The best way to find out whether there is a need for your product is to ask someone to buy it. If you don’t have the funds to start your product business but you really have a passion for creating whatever product business it is that you’re creating, what you could do is to actually fund the initial purchase of your products via pre-order.
That might feel a little uncomfortable to some people because a lot of people are perfectionists and the idea of having something imperfect go to market feels a little “uh” and all the spider senses might be going off but, actually, if the product that you’re selling is something that’s worth investing in from your clients, or if what you’re going to provide is going to improve people’s lives, wouldn’t it be amazing to have a pre-order for your first range and that then launches your business model so that you actually don’t need to take on investment in the traditional sense? Or perhaps until you need to make the next big investment which might be a warehouse or a really comprehensive website or something along those lines.
Mia Fileman 8:13
I love, love, love that idea because it’s not only great money management. It’s also great marketing because you’re essentially validating your offer. Before you’re going all-in with a new brand or a new product, you actually go out there and ask real customers whether they want it and whether they’re willing to put their money where their mouth is. I’m a huge fan of that strategy.
I don’t know if you did this, Fi, and you don’t have to admit to it, but before I actually had created Campaign Classroom, I sold Campaign Classroom, then I built it week by week in the first intake. Now, of course, it’s built and finetuned, but that very first intake I wrote as we were going.
Fiona Johnson 9:02
I not only did that, too. I am proud that that is how I did it.
Mia Fileman 9:06
Same.
Fiona Johnson 9:07
I actually told my students while they were going through that first round that we were cocreating the course together.
Mia Fileman 9:15
Yes!
Fiona Johnson 9:15
There’s nothing like being able to get that instant feedback.
In our context as online business owners, that feedback is being on Zoom and realising, “Oh, they don’t understand what I’m talking about here. I’ll need to go and amend that for later.” Instant feedback for a product business that’s going to a market where there’s literally people walking past your stall and seeing what you’ve got to offer. In the virtual world, as a product business, your website page or your home page is a place to have instant feedback.
Asking people if they would buy something that might come in the future is a complete waste of your time.
Mia Fileman 9:59
Totally.
Fiona Johnson 9:59
But by putting the product – whether that’s a course or a physical product or even a service that you plan to build out – asking somebody to pay for that before it’s ready is actually perfect because you’re getting funding from the person whose life is actually being improved through the delivery of that product or service. You never have to question whether it’s something that people want or not.
Mia Fileman 10:25
Great! What I’m hearing is that there are lots of different ways to skin this cat.
You don’t have to do things a particular way. If you have personal funds or seed funding that you want to invest in your business, then go for it. You don’t always have to have money in the bank before you make an investment. Business is inherently risky. Sometimes, you need to back yourself and say, “Well, I don’t want to spend two years building this. I just want to put down some cash initially and hit the ground running.” Likewise, if you don’t do that, that’s okay, too. You can absolutely grow your own way.
Fiona Johnson 11:06
Yes.
Mia Fileman 11:07
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I want to talk to you about hiring because a lot of the listeners are at that stage now where they’ve reached capacity of what they can do as a business owner – either e-commerce founders or service-based founders. They are already working all the hours that they can work. Now, they’re at that stage about whether they should hire or whether they shouldn’t hire.
Do you have any advice or experience about when is the right time to bring on staff? What milestones should a business be looking to hit before they make that investment in a team?
Fiona Johnson 12:26
Yes, I love this question. It’s interesting.
I know we share this opinion that I really think it’s important to upskill before you outsource.
Mia Fileman 12:36
Yes!
Fiona Johnson 12:36
Whether that’s learning about running a marketing campaign or whether it’s learning about how to put together a business model or how to manage your finances, you are so much more likely to hire well and manage somebody well if you understand what they are doing and what doing it well looks like.
That’s the first thing – to know at least a little bit about the area that you want to hire into.
The second thing to consider is “how will I leverage this investment?” If you have currently more demand for your product or service than you can fulfill, that is a good indicator that there is some scope there to leverage that other person.
If you are wanting to hire somebody because there’s an idea that having somebody else join your team might allow you to grow the demand for your product or service, I’d say you’re probably doing it in the wrong order.
The best way to start a new hire is to have them start with a full workload if that’s something that you’re working towards. In the example of a service business, ideally, you want to be building a waitlist, so that when that person starts, they actually have at least half a workload.
If they started with a full workload, that would be amazing, but actually starting to build waitlists and even just asking your clients if they would join a waitlist is a good starting point because, if people aren’t willing to wait a couple of months for you to build that new capacity in, that’s probably not a great sign that there is actually legitimate demand for that product or service.
With a product business, the same is true. If you’re finding that you’re not able to leverage your own time and the business model that you have, then it’s time to start thinking about “do I need more people in my team?”
Then, the next thing to consider is “what is it that I’m trying to leverage here?” What does success with this hire look like? Does it look like me having more time outside of work? If so, with who? That’s a great thing to aspire to if the idea of success for this new hire would look like you are being able to service more customers or to be able to better support the customers that you have, and therefore you’ll be able to charge higher prices or earn more profits.
It’s really understanding, what am I trying to achieve with this hire? What does it allow me to gain? Is it more time for myself? Is it better clients? How do I leverage this? If you plan to hire somebody for $60,000 a year, how does that actually fit into your overall business picture?
The other little tip I have is a little bit more practical. If you are using the profit-first system – which I’m sure many listeners are – where you’re putting money aside for different aspects of your business, if you’re starting to see the amount of money in your operating expenses or your people costs build after you’ve paid your existing team, that is a good sign that there is already some extra budget there for another person. That can be a really practical way of seeing, “Yes, there’s money building up in that account there. There’s something to look at here.”
Mia Fileman 16:16
Yes, that is such great advice, Fi. I think that that’s really, really valuable to people tuning in.
I think it really does come back to the kind of business that you want to run. When I ran an agency, I swore black and blue that I was never going to hire staff again, and that it was going to be me, myself, and I in this business.
I’m glad that I went back on that decision because my team now – Emily and Ashley – are incredible. You realise that, for all these promises of scaling your business to seven figures in your sleep, first, you need to grow your business. if you don’t have anymore time to dedicate to this business, then something’s got to give. You can’t magically service more clients if you don’t have any more time to give.
If you have reached a point where you can’t grow your business anymore without building your team, then you have to decide. “Either this is enough for me or actually I do want to see the potential of this business and look at making that hire.”
The other thing I want to mention at this point is to be aware of false economies. Amongst the start-up ecosystem, particularly female founders, they are a little bit reluctant to hire proper permanent employees, and they tend to use a lot of contractors.
However, I asked my consultants to do a side-by-side comparison of the actual cost of contractors versus employees. It was substantially more cost-effective to bring on my team as permanent part-time employees rather than contractors because you’re paying huge hourly rates and so forth. Yes, it’s appealing because you can choose not to use those contractors at any time, but I don’t want to be paying $60.00 and $80.00 hourly rates. Keep that in mind.
Fiona Johnson 18:14
I’d like to pull that out a little, if I may.
Something that I want to raise is that I think a lot of people see the size of their team as an indicator of their success. If having a big team is what success looks like for you, awesome, but if having a small team or operating on your own schedule as a highly specialised solo person is what success looks like to you, then I think we need to learn to celebrate that more and start really shedding a light on the beauty that can come from having a company of one. There’s a fantastic book on that topic.
The other thing to note about hiring a team member as an employee or working with a contractor is I think it comes down to understanding where your strengths are and what you want to do as the leader of the business.
One of the benefits of working with a contractor is that they theoretically come pre-trained. They’re already self-motivated. They don’t need to be briefed in the same way as an employee does. But, yes, they will be more expensive when they’re working, but they can generally get straight to the work whereas hiring an employee is an investment. It’s a long-term strategy. It’s a long-term investment in time and money for your future business.
Mia Fileman 19:40
That’s such a great point. Yes, I’ve never actually thought about it like that. That’s a really, really clever way of summarising it. Thank you!
Good news! There’s more to this chat. Play the next episode to hear the rest of the conversation.
